Fair Investment Company’s Nick Scarrett comments on Chancellor Alistair Darling’s Budget announcements and their impact on savers and investors:

ISA Allowance
“The increased ISA allowance, which comes into force next tax year (from April 6th 2010) is great news for savers and investors alike, and will really boost people’s tax efficient savings.

“However, this is nothing new, and the announcement that the ISA allowance will increase each year inline with inflation is unlikely to make any real difference.”

Capital Gains Tax
“There had been fears that he would raise it from 18% to something nearer 50% in an attempt to close a loophole he feared higher tax earners might take following the rise in their income tax, but he has obviously realised a change would do more harm than good.

“Increasing CGT would not raise much revenue, but would have a negative effect on wealth creation in this country.  If he wants to bring CGT and income tax for higher earners together, he should be looking at lowering the income tax rates for higher earners – studies show that having higher rates of tax don’t actually bring in more revenue. Lower rates of tax produce more for the coffers because people have less incentive to look for ways to avoid it.”

Inheritance Tax

“The freeze on the inheritance tax threshold is bad news for families and beneficiaries, and means that the heirs of more householders will be liable to pay the 40% tax if property prices rise.”